Striking an Upbeat Note

When you are named vice president of Led Zeppelin’s record company at age 24, you know you are on a fast track in the pop music world. Since those heady days in the mid-’70s, Danny Goldberg has lived up to the promise by assembling one of the most impressive resumes in the music business.

As a partner in Gold Mountain Management from 1984 to 1992, Goldberg helped guide the careers of such celebrated artists as Bonnie Raitt and Nirvana. He subsequently did so well as senior vice president and then president of Atlantic Records (where Hootie & the Blowfish, Stone Temple Pilots and Jewel were signed during his tenure) that he was tapped in 1994 to succeed the legendary Mo Ostin as chairman of prestigious Warner Bros. Records.

But Goldberg’s stay at Warner Bros. was short-lived. He was one of a handful of top executives fired or cut loose by the Warner Music Group in a massive corporate realignment. Goldberg quickly rebounded at rival PolyGram, where he was named president of Mercury Records in 1995. While there, he has helped the label nearly triple its market share, thanks to the signing of such acts as Hanson, Cake and the Cardigans. In September, he was promoted to chairman of the Mercury Group, which now includes Motown and Def Jam Records.

Long active in the American Civil Liberties Union, Goldberg, 47, is widely regarded as one of the most articulate and visible figures in the record industry. In discussing the state of the industry at the start of 1998, he reflected on both its commercial and creative health.

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Question: One of the big debates in the record business these days is over the health of the industry. Sales picked up in 1997, but there were some gloomy projections in 1995 and 1996. And there is concern being expressed over the apparent difficulty in building career artists as opposed to one-hit wonders. What is your take on all of this?

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Answer: I think it is very important to make a distinction between the general consumer level of interest in music and the financial picture at this frozen moment in time. The public’s interest in music is very high. Christmas sales this year are significantly better than last year.

Q: What do you think caused concerns about the financial health of the industry?

A: The financial problem, which I feel is temporary, is related to two things. First, there’s the maturation of CDs as a format. The double-digit revenue growth of a decade or more wasn’t due to double-digit increases in unit sales. It was due to people who had been buying $9.98 cassettes switching in their buying habits to $15.98 or $16.98 CDs. As a worldwide process, that took 10 to 12 years . . . and then CDs matured.

That meant the increase in revenue due to this conversion stopped, but the actual appetite for music didn’t diminish in any way. It is increasing approximately at the same rate that it has increased for all that 10-year period of growth--2, 3, 4%.

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Q: What’s the second aspect of the financial problem?

A: There has been a well-publicized crisis in the retail sector that had nothing to do with record companies or music, but which affected both of those groups. In 1994, there was an over-expansion of stores due to some theories on Wall Street having to do with financing of retail chains. The statistic I heard was there was 20% extra shelf space created, but obviously there weren’t 20% more consumers.

So that caused a Darwinian world where a number of bankruptcies have taken place at the retail level and that has caused in some instances incomplete payments to record companies. In addition, increased demands in retail for certain types of support, including co-op advertising, have also put pressure on record companies. And those pressures have taken away money that, in a healthier financial period, would have been used for long-term artist development. That [situation] has been fueling a little bit of the pop, hit-driven atmosphere at the record companies. But all of that, to me, is temporary.

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Q: What things encourage you about the future of the business?

A: One thing that I think will be a big help is that there is a big group of teenagers on the way. . . . All these kids who are buying the Spice Girls and Hanson. A lot of them are in their preteen years . . . the so-called children of the baby boomers. As they come into the teen years, that is going to be another growth.

Q: What about the issue of the quality of music today?

A: I think that’s pretty cyclical. If you look at the disco period or all the so-called “hair bands� period of the ‘80s, you had a lot of people who had some very big records, but who didn’t have a long run. I think you always have periods like that. I don’t think creative visions from God that inspire musicians are suddenly turned off like a faucet.

I just think there are periods when the public is a little more pop-oriented and song-oriented, and other cycles when they are more artist-oriented. But I think there’s also another factor at work here. A lot of this talk [about lack of career artists] is due to a bias by people who come from a rock background. They discount other genres.

I think that if you look at Garth Brooks or Shania Twain in the country section or a Puffy Combs and LL Cool J in hip-hop or a Boyz II Men or a Mariah Carey in R&B; or pop--these are not one-hit wonders. They are artists who have important album after album. They just don’t happen to be rock bands. I just think rock has been a little bit in a transitional phase, which happens from time to time as some of the young bands that had become big become elder statesmen and we wait for new bands to come along.

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Q: Do you think those rock bands will be coming? There’s one theory that young people have less time for music because of their interest in video games, the Internet, etc.

A: I always thought that was a foolish idea. Music to me plays a unique role in people’s lives. People don’t dance to a video game. They don’t deal with their deepest inner feelings listening to a computer humming. I think there have always been other things besides music, and there will be other things. But I don’t see any evidence that people are less into music.

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Q: What do you think accounts for the lack of young bands that can fill arenas?

A: There was a real rupture in the natural development of the rock business. You had the destruction of Nirvana [with the 1994 suicide of leader Kurt Cobain] and you had Pearl Jam fundamentally opting out of the tour business at one point. You also had R.E.M. doing limited touring. So you had some of the most important bands doing little or no touring, so that caused a bit of a rupture in the growth of the concert business. But it’ll rebuild.

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Q: Let’s look at the record companies themselves. In this age of conglomerates, record labels seem to be changing executives the way baseball teams are changing players. Does this instability cause problems at the labels?

A: It’s not good for these companies to have unstable management. There is a period now where all the major labels are part of bigger major media companies, and there is a certain anxiety that all the people who are running the record companies have about the size of the parent companies, and their ability to really connect with the forces who are running them.

I have an advantage at PolyGram, where the CEO [Alain Levy] comes from the record business. But in general, changes at record companies are not good for the companies.

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Q: As a music fan, what records did you particularly enjoy this year--apart from your own company’s releases?

A: I always hate doing this because I know I’m going to forget some records that I loved, but some of the ones that come to mind were the Wallflowers album. I liked that a lot. And Fiona Apple . . . Wyclef Jean . . . Erykah Badu . . . Paula Cole’s record . . . Imani Coppola . . . Shawn Colvin . . . Puff Daddy. And, I have to say, being an aging hippie, I join with all the other people who loved Bob Dylan’s record and rejoiced in it.

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CROSSROADS

The daily Calendar section is presenting a series of interviews, which began Dec. 29 and will conclude Thursday, with arts and entertainment leaders. Here is the schedule:

Dec. 29

Film: Harvey Weinstein

Dec. 30

Architecture: Zaha Hadid

Dec. 31

Television: Martha Williamson

Jan. 1

Restaurants: Nancy Silverton

Jan. 2

Theater: Peter Schneider

Jan. 3

Jazz: Bruce Lundvall

Monday

Music: Tan Dun

Tuesday

Art: Paul Schimmel

Today

Pop music: Danny Goldberg

Thursday

Dance: Arthur Mitchell